Proprietary Trading Firm of course!

TL;DR

1. Join a proprietary trading firm to grow your income.
2. Make sure your trading strategy works consistently for a few months
3. Have a strong trading psychology
4. Choose a good prop firm that fits your trading strategy.

Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions.

Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to participate under my affiliate links, please feel free to Google them separately. Cheers!

Prop firm aka Proprietary Trading Firm is a financial institution that uses its own capital to trade the financial market. An individual retail trader can apply and join the prop firm to secure more funds for their trading to increase their capital and income in the future.

Although most traders have the freedom to execute any type of strategy they like. However, most firms have relatively strict guidelines for their traders. For example, some firms require its trader to earn at least 10% of their capital within a month and will collect an entry fee in case the trader fails the challenge. Here are some checklists before joining a prop firm.

Checklist before joining a prop firm:

1) Make sure your trading strategy works consistently for a few months.

This is the most important factor before considering joining a Prop Firm, mainly because of the high upfront entry fees to start trading. For example, FTMO requires a new trader to pay a minimum of €155 ($167 USD) to secure a trading account. Therefore, unless your trading strategy can consistently produce around 8% to 12% profit, then you will have a chance of succeeding in this challenge.

2) Have a strong trading psychology

Trading psychology refers to how a trader handles the trades emotionally and has a good mentality toward trading. Traders must know how to handle both losing and winning trades. When it comes to trading with a prop firm, traders are only allowed to lose a fixed amount of capital. For example, FTMO only allows a maximum loss of 5% of the capital before the trader is “fired”. Having both good money management and a strong mentality is essential to have faith in the strategy, avoid revenge trade and escape the “Cycle of Doom”.

3) Choose a good prop firm that fits your strategy trading.

There are too many good trading strategies out there. If you are not seeing any results, it is not because of strategy is not good or the market is out to get you. Chances are high that the strategy does not fit your trading style, some people are more suitable for swing and some for scalping.

Which Firm To Join? Here’s a quick guide.

FTMO

The most popular Prop Firm in the market.

Max loss 10%, Up to 90:10 profit split.

Profit Target 10% within a month.

No holding trades over the weekend, all trades must be closed on Friday.

€155 refundable one-time fee.

Most suitable for scalp/day traders.

The5ers

Great alternative for Swing Traders.

Max loss 6%, Up to 100% profit split at the highest tier. 75% profit spilt most of the time.

Profit Target 10% within a year! Essentially no time limit.

Holding trades over the weekend is allowed.

$260 Non-refundable one-time fee.

I decided to join The5ers.

My trading strategy involves holding overnight + weekend trades and my monthly profit ranges from 5% to 8%. FTMO is out for me as I could not hit the profit target within a month. Therefore The5ers would be a better choice for me as I can take longer to reach the profit target. However, I can only have a max loss of 6%, which forces me to have solid risk management. I can only risk 0.5% per trade in the event of multiple consecutive losses.

EndNote/Advise

My best advice for traders is to find a good strategy that fits your trading style before even thinking about joining Prop Firm. Earn the entry fee from your trading first, this will prove that your strategy works and has the potential to consistently earn in the long run.

Here is my affiliate link: the5ers.com?ref=42234

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